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In this case it's due to a combination of owning long term debt locked into 10-30 years and depositors fleeing the bank. It's precisely the opposite, because t

In this case it's due to a combination of owning long term debt locked into 10-30 years and depositors fleeing the bank. It's precisely the opposite, because the money printer is now a money vacuum, a lot of banks have solvency issues. Money printing would have saved FNB.

TekMol 3y ago
because the money printer is now a money vacuum Depends on your definition of "now". (Related: "How Long Is the Coast of Britain?") The printing of unprecedented amounts of money from 2008 to now created those low yields the banks are seeing. And now there was a tiny increase in yields the banks go under. This would not have happened with a stable supply of the base currency.
- JumpCrisscross 3y ago
  > would not have happened with a stable supply of the base currency We spent millennia with examples of stable, metal currencies and bank failures. Then, like now, bankers chased risks. First Republic financed long-term Treasuries. Romans financed eastern fineries [1]. Many others blew capital on kings’ failed wars. Booms and busts are inherent to money and credit, this is a foundational learning every industrialised non-Malthusian society learned fast and, in many cases, including our own, the hard way. [1] https://epicenter.wcfia.harvard.edu/blog/financial-crisis-then-and-now https://epicenter.wcfia.harvard.edu/blog/financial-crisis-th...
  - qwytw 3y ago
    They weren't even exactly stable if you look at data between 1800 and the 1930s , though: https://www.officialdata.org/us/inflation/1800?amount=1#:~:text=Value%20of%20%241%20from%201800,cumulative%20price%20increase%20of%202%2C295.52%25 https://www.officialdata.org/us/inflation/1800?amount=1#:~:t.... or even in the 18th century: https://www.in2013dollars.com/UK-inflation https://www.in2013dollars.com/UK-inflation The counter-swings just created an illusion of longterm stability. But it definitely didn't feel that way for people living on the ground (of course a lot of that is down to unstable food supply and not just the monetary system. Not that it was avoidable, you can't really have a fiat currency without a stable and somewhat reliable government anyway).
- qwytw 3y ago
  > This would not have happened with a stable supply of the base currency. You wouldn't have had a stable fractional banking system prior to the 1930s anyway. So yeah, in a way you're right. Generally financial systems are much more stable nowadays than they were under the gold standard.

TekMol 3y ago

because the money printer is now a money vacuum Depends on your definition of "now". (Related: "How Long Is the Coast of Britain?") The printing of unprecedented amounts of money from 2008 to now created those low yields the banks are seeing. And now there was a tiny increase in yields the banks go under. This would not have happened with a stable supply of the base currency.

JumpCrisscross 3y ago
> would not have happened with a stable supply of the base currency We spent millennia with examples of stable, metal currencies and bank failures. Then, like now, bankers chased risks. First Republic financed long-term Treasuries. Romans financed eastern fineries [1]. Many others blew capital on kings’ failed wars. Booms and busts are inherent to money and credit, this is a foundational learning every industrialised non-Malthusian society learned fast and, in many cases, including our own, the hard way. [1] https://epicenter.wcfia.harvard.edu/blog/financial-crisis-then-and-now https://epicenter.wcfia.harvard.edu/blog/financial-crisis-th...
- qwytw 3y ago
  They weren't even exactly stable if you look at data between 1800 and the 1930s , though: https://www.officialdata.org/us/inflation/1800?amount=1#:~:text=Value%20of%20%241%20from%201800,cumulative%20price%20increase%20of%202%2C295.52%25 https://www.officialdata.org/us/inflation/1800?amount=1#:~:t.... or even in the 18th century: https://www.in2013dollars.com/UK-inflation https://www.in2013dollars.com/UK-inflation The counter-swings just created an illusion of longterm stability. But it definitely didn't feel that way for people living on the ground (of course a lot of that is down to unstable food supply and not just the monetary system. Not that it was avoidable, you can't really have a fiat currency without a stable and somewhat reliable government anyway).
qwytw 3y ago
> This would not have happened with a stable supply of the base currency. You wouldn't have had a stable fractional banking system prior to the 1930s anyway. So yeah, in a way you're right. Generally financial systems are much more stable nowadays than they were under the gold standard.